Talking Tax

The quick pace of consultations into complex new rules from the OECD is keeping tax practitioners busy.The Paris-based institution has already in 2022 launched several consultations into the “building blocks” of a new international tax system. Pillar One of the plan would reallocate a sliver of the profits of the largest and most profitable businesses to countries where they make sales. Pillar Two would establish a 15% global minimum tax.Tim Sarson Partner, U.K. head of tax policy at KPMG U.K., talks with Bloomberg Tax’s Hamza Ali about the emerging rules in the latest episode of Talking Tax.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

The OECD's Inclusive Framework on Base Erosion and Profit Shifting is aiming to help developing countries implement a global agreement to change how multinational companies are taxed, according to the co-chair of its steering committee.The agreement, which more than 130 countries signed up to in October, has two pillars. Pillar One reallocates a portion of the largest multinationals’ profits to market jurisdictions, while Pillar Two creates a global minimum tax rate of 15%.The two pillars come with enormous complexities, meaning some countries will need help to keep up with the pace of implementation, says Marlene Nembhard-Parker, chief tax counsel for legislation, treaties, and international tax matters at Tax Administration Jamaica and co-chair of the Inclusive Framework Steering Group.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

The OECD released a draft framework March 22 that would standardize how global tax authorities regulate and share tax information related to cryptocurrency assets.The draft—called the Crypto-Asset Reporting Framework, or “CARF”—includes model technical rules and a commentary written for wide adoption and data-sharing among tax administrations.Countries that adopt the Organization for Economic Cooperation and Development's standards would require individuals and entities that “provide services to exchange crypto-assets against other crypto-assets, or for fiat currencies” to identify their customers and report the aggregate values of the exchanges and transfers on an annual basis.Buchanan Ingersoll & Rooney PC international tax attorney Sahel Assar called the draft proposal a “tsunami” of regulation coming for cryptocurrency and related industries. Regulation, she says in our latest podcast, helps to legitimize the crypto industry.The OECD is gathering public comments on the draft through the end of April. It aims to update the proposal and present it at the October meeting of the Group of 20.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

Recent court rulings striking down two Internal Revenue Service reporting requirements suggest the agency may need to change its procedures so that its rules will hold up in court.The U.S. Court of Appeals for the Sixth Circuit struck down a tax reporting requirement on March 3 in Mann Construction, Inc. v. United States. That decision was cited by the U.S. District Court for the Eastern District of Tennessee when it struck down a separate reporting requirement on March 21 in CIC Services, LLC v. IRS.The decisions come as the Treasury Department, and the IRS within it, face increasing scrutiny over whether their tax rulemaking procedures have met legal requirements.On the latest episode of Talking Tax, Melissa Wiley, Member in Caplin & Drysdale's D.C. office, and Kristin Hickman, law professor at the University of Minnesota, discuss what the decisions could signal about how courts will approach federal tax rulemaking procedures. They speak with Bloomberg Tax's Aysha Bagchi and Jeff Leon.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

Gasoline prices have reached record highs in recent weeks, spurring lawmakers across the country to look for ways to offer some relief.A popular target: the excise taxes the federal government and states collect to fund transportation programs. Some congressional Democrats have floated a suspension of the 18.3 cent-per-gallon federal gas tax, while many governors are pursuing state holidays that could provide some temporarily relief to drivers.Temporarily ditching the gas tax would offer some obvious political benefits for lawmakers running for re-election this year. But how much would it actually help consumers with the national average for regular gasoline up to well over $4 a gallon and gas prices nearing $6 a gallon in California?Lucy Dadayan and Howard Gleckman of the Urban-Brookings Tax Policy Center appear on the latest episode of our weekly Talking Tax podcast to talk about proposed gas tax holidays. Gleckman argues that suspending the federal excise tax could actually fuel further price increases, while Dadayan suggests states should instead look at targeted tax rebates to help low-income families struggling with inflation.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

The accounting profession offers career options that go beyond working for a CPA firm or corporate finance.George Azih found that his years of working in both arenas built the perfect launch pad to start his own business, and solve some complex financial accounting problems along the way.Azih is the founder and CEO of LeaseQuery, an Atlanta-based company that provides lease accounting software to businesses. In just a decade, Azih turned his startup into a business that Deloitte ranked among the 100 fastest-growing tech companies.On today’s episode of our weekly podcast, Talking Tax, Azih talks with reporter Amanda Iacone about why he got into accounting and his experience as a Black entrepreneur. He also talks about the value of diversity in accounting and of searching for your diversity blind spots.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

Courts in Canada have been making high-profile rulings on a key area of corporate tax law in recent years and the federal government could be making even more changes.Transfer pricing—the rules governing how entities within the same corporate group must make transactions as if they were arm’s length—represents a sizable chunk of the money the Canada Revenue Agency collects in tackling aggressive tax avoidance by companies. A court submission by the agency in 2021 said adjustments from transfer pricing over the three previous years increased government revenue by C$11.84 billion ($9.3 billion).But judges have been dismissing the agency’s arguments when companies have decided to fight those adjustments in courts. Two decisions, one dealing with the uranium miner Cameco Corp. and a second with herbicide supplier Agracity Ltd., have grabbed tax practitioners’ attention because of how the courts interpreted Canada’s transfer pricing laws.The federal government has promised a reform of the underlining legislation in light of its courtroom losses, but Ottawa’s options for rewriting the rules are anything but simple. On the latest episode of Talking Tax, David Hogan, partner at Richter LLP, talks about the impact the latest court decisions have had on transfer pricing and where the legal fight could be headed.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

Corporations and wealthy taxpayers breathed a sigh of relief when Democrats' economic agenda stalled in the Senate late last year.The roughly $2 trillion package—which the Biden administration branded "Build Back Better"—included a variety of tax hikes, including major changes for pass-through entities.While corporations and high earners may have dodged anticipated tax increases last year, they aren't necessarily off the hook. The legislation remains stalled, but labor and environmental advocates are pushing for President Joe Biden to re-engage with holdout Sen. Joe Manchin (D-W.Va.) in an effort to find a deal.A pair of tax professionals appear on the latest episode of Talking Tax to discuss the Biden administration's stalled tax plans. Laura Zwicker, chair of the Private Client Services Group at Greenberg Glusker, covers how the proposals would effect her high-net-worth clients and what she is advising them to do while the legislation remains in limbo. Then Sarah Brodie, a partner at Morgan Lewis, highlights how partnerships dodged major changes to how they are taxed.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

The European Union wants to harmonize how companies issue electronic value-added invoices across the bloc as part of a broader push to make VAT easier to pay.The EU is hoping e-invoicing will help ease complexity and close the gap between expected VAT revenue and what countries actually collected. Lost VAT revenue reached 135 billion euros ($152 billion) in 2019 alone, according to the European Commission.The Commission in January launched a public consultation to explore its role in reducing the administrative burdens of VAT compliance—including harmonizing e-invoicing rules—for businesses and in helping member countries fight VAT fraud. At least 13 EU countries already have, or plan to implement, e-invoicing systems, but variations in rules across the bloc are creating administrative headaches for companies.The deadline for comments is April 15 and the Commission plans a legislative proposal in summer or fall.On the latest episode of Talking Tax, Ellen Cortvriend, director of indirect tax technology at PwC Belgium, talks about what countries are doing on the e-invoicing front, what's ahead for the EU, and what businesses could expect this year. Cortvriend also leads PwC’s global e-invoicing and e-reporting division.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

The Biden administration made headlines last year with its plan to provide $80 billion to the IRS to bolster audit and enforcement activities, and tackle the so called “tax gap”—the difference between the amount taxpayers owe and how much they actually pay. It's estimated at $600 billion annually.But what about the states?State revenue departments will face some significant challenges, such as years of chronic underfunding by state legislatures, the loss of experienced auditors, practical limitations resulting from the Covid-19 pandemic, and the growing complexity of state tax codes.To learn about how states are dealing with these state audit and enforcement challenges, we hear from Greg Matson, executive director of the Multistate Tax Commission, and Nancy Prosser, the commission's general counsel. They talk with Bloomberg Tax's Michael J. Bologna about their priorities for this year and why working remotely just isn't as satisfying for tax auditors.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.